Category Archives: Home Investment

Investing in a property is a big commitment, with the benefit of security but the downfall of being expensive. Renting can be a helpful alternative, but has its own flaws and issues. When choosing whether you want to buy or rent, you need to look at both sides. Consider the advantages and disadvantages of each option and see which would best suit your lifestyle and budget.

Renting

Advantages
No commitments to one area

If you choose to rent a house or apartment, you aren’t making a huge commitment as you have the freedom to leave once your contract expires. You may be interested in moving to a certain location but want to test the waters first. Renting can help you to get a feel of the area without making the mistake of buying, then changing your mind. This can be especially appealing to people who are fond of moving home frequently. If you enjoy living in various places and have no ties to one particular town, renting can be the safe option which allows you to experience a city as a resident, without committing to living there for longer than a year’s contract.

Flexibility

For some people with fast-paced, international jobs, buying a home isn’t a wise move. Your career could take you around the country, or even the world, leaving your home standing empty, with big monthly mortgage payments regardless. If your job could take you away at short notice, renting an apartment or house gives you more flexibility so you’re not tied down to your home.

Landlord covers maintenance and repairs

One of the biggest advantages to renting is the lack of maintenance work you need to do to the property. If there are any repairs that need doing, it shouldn’t be up to the tenant to fix them. This is the job of the landlord who will keep everything in the home in working order, without you lifting a finger or spending a penny. If you were to buy a house, any maintenance jobs would be your problem, and any repair costs would come from your pocket.

Disadvantages
Fluctuating rent costs

When you rent a property you are required to sign a contract. This will ensure that your monthly rental costs are the same each time. However, once your contract ends, your landlord could decide to increase the price. If you want to stay in your rented home, you will have to accept the rising rent prices.

Landlord and estate agent fees to renew or leave

Some estate agents will insist that you must pay fees for various things, such as leaving your property or re-signing a contract. These fees can be expensive and leave you with less money than you had planned on having.

Not getting deposits back

When you move into a house or apartment you are usually required to put down a deposit which secures your contract and will be returned to you once you leave. However, with some landlords it can be hard to get your deposit back as they can insist that you have damaged the property in some way and try to refund you less money. It’s always worth taking photos of all the rooms in the property when you first move in, as proof that you are leaving the place in the exact same condition as before.

Buying

Advantages

Can improve to boost value and sell

You may be keen to buy a house as a financial investment. Some people buy homes for a low price, renovate them, boost the home’s value, then sell it later for a higher price with the intent of making a profit. This can be an interesting and sometimes rewarding way of getting on the property ladder, making some extra money and securing your future with more funds to go towards retirement or your children.

Security and homely

Renting a property may be more flexible and less of a commitment, but it may also never truly feel like home. Unlike when you rent, when you buy a property you are able to decorate and renovate the place and make it your own. This can make it feel more like home, whereas renting can sometimes feel temporary and not very homely. Buying a house can also bring security for you and your dependants as you will one day own the property, and it can be a place to raise a family, then pass on to them one day.

Disadvantages

Expensive deposits

Buying a house isn’t cheap. Not only do you need to be prepared for monthly mortgage payments, but you also need to put down a large deposit to secure your home. Deposits can be as little as ten percent of the home’s value, but this can still be at least £10,000. This is a huge amount of money to need to save, and it can take years to save up enough to invest in your home.

Missed mortgage payments

If you don’t pay your rent, you can get kicked out of your property. But the consequences are much higher when you buy your home. Not only would you have to leave your house if you couldn’t keep up with mortgage payments, but you may also lose money you invested in your home in the process. Mortgage payments can also last for decades, so you need to be financially secure and prepared before buying a home.